Saturday, November 21, 2015

Mideast Regional Chess Games for Strong Players: The case of ISIL

By Antonia Dimou

Originally published: In-depth Newsletter (Vol. 12, Issue 3), October-November 2015, Cyprus Center for European and International Affairs, University of Nicosia, 
http://www.cceia.unic.ac.cy/index.php?option=com_content&task=view&id=452&Itemid=452

(Photo fromwarincontext.org)

The conduct of two separate airstrikes in Syria, led by the United States and Russia respectively, comes as part of a strategy to defeat and degrade the Islamic State of Iraq and the Levant (ISIL) in pursuance of revisiting the international response to the Syrian conflict. The prolonged neglect of the conflict in Syria has admittedly created power vacuums, paving the way for extremist groups to gain and control territory. The prospect of de facto territorial divisions is a reported reality with territory under control of ISIL; territory held by the Assad regime; and territory controlled by enclaves of diverse fighter groups.

ISIL is deemed to be an existential threat to Arab and Muslim states as well as to religious minorities and western countries. In fact, its military victories in Syria and Iraq make it the first Sunni extremist group to control territory, enhancing its ability to recruit fighters, acquire wealth and additional territory, and project a global end-state. ISIL’s declared goals are to defeat Damascus, capture Baghdad, take Mecca, destroy the Kaaba, and ultimately capture Jerusalem. Also, as publicly declared, it plans to turn its attention to Asia, the West, and the United States. According to the ISIL map of the world, as released by British Daily Mail on 30 June 2014, a five-year plan entails the group’s expansion to the Middle East, North Africa, parts of Asia, the Balkans and European countries such as Greece, Austria, Cyprus, Italy and Spain. It is in this context that security services of Arab and European countries compare the current situation to pre-9/11 Afghanistan.

At a time when no one is confident that ISIL will be defeated quickly or easily, a series of questions emerge and are related to the group’s standing with most prevailing the following: What is ISIL’s ideology? Where does the financial support and military equipment come from? Why people join ISIL? What are the main policies of containment?

ISIL’s military inspiration and ideology began with the rise of Wahhabism in Arabia in the late 18th-early 19th century, culminating in 1804 in the destruction of the Shia shrine cities of Karbala and siege of Najaf. The religious promulgations of its leader, Abu Bakr al-Baghdadi, are grounded in legitimate Islamic symbolism, jurisprudence, and Quranic readings, and this is the reason why so far no single religious leader or institution has countered effectively the ideological claims of ISIL.

Notably, ISIL claims that worship of idols and shrines like the Kaaba and Islamic prophet Muhammad’s gravesite have replaced worship of Allah and thus must be destroyed. Evidently, ISIL’s declaration of war is against enemies considered as posing a threat to Sunni Islam, namely the West, Shi’a Muslims including the Assad regime, and the regional monarchs who have failed to defend Sunni Islamic values.

When it comes to ISIL’s military equipment, its weaponry is largely USmanufactured, and the group has also soviet-designed T-72 tanks captured from the Iraqi army, and helicopters, but no pilots. It is noteworthy that the Iraqi military was easily defeated by ISIS because of the military’s poor training, more as a police than a military force, lack of adequate military campaign experience, and the replacement of Sunni officers by untrained and unskilled personnel. ISIL is not a single, unitary force but rather six or seven separate groups operating under a common banner. Its ranks include exBaathists, Naqshbandi fighters, Ansar al-Sunnah, Kataib al-Fateh, and other factions. The group reportedly generates revenues, which contribute to the expansion of recruitment, through exports of unprocessed and often contaminated crude oil at about 30% of the market value for a profit of about $1 million a day, and through the maintenance of a low level of natural gas production from seized fields near Kirkuk.

ISIL’s success in recruitment lies in its ability to create a new “tribe” with common cause and goals. Foreign fighters joining ISIL come from diverse backgrounds, and the majority appears to be well-educated and from middle class backgrounds, not the lowest stratum of society as many suppose. There are multiple reasons people join ISIL, such as the search for affinity, personality qualities or characteristics such as inclination for violence and sadism, adventure, financial motivation, the success in depicting rival groups as too lenient, especially in contrast to Al-Qaeda, and solidarity with Syrians. Social media remains an important means of advertising and recruiting. For example, many foreign fighters use VK.com, the Russian version of Facebook, because it is neither blocked nor censored.

Factors that account for ISIL’s territorial successes lie in frustrated Sunni tribes and politicians who continue to support the group’s efforts to advance through Iraq and Syria, the existence of weak military and civilian institutions, a power vacuum in eastern Syria and western Iraq, and rising sectarianism. It is argued that, in the long-term, ISIL could not sustain its current level of territorial successes given that the group’s 30,000 fighters could not govern 8 million people without being able to provide basic services, such as electricity and water. It is estimated that it is for this reason that the group employs “spectacular violence” as means of boosting its ability to remaining in power.

For an effective ISIL ideological containment, Arab and western governments need to work with local communities, local leaders and families towards the same goal which is the cease of the killing of innocents. Educational reform and “people-to-people” contacts are keys for the de-radicalization of people and prevention of jihadist recruitment.

A central role also needs to be played by moderate religious authorities, when it comes to the battle of ideas, to counter ISIL extremist arguments in the media. Additional policies in containing ISIL efforts to recruitment can include (a) the development of a strategy to prevent ISIL from sustaining itself through energy sales by publicizing and sanctioning governments and companies doing business with ISIL; (b) Enforce the legislation that has been passed in 30 countries that bans ISIL; and, (c) Offer education and the right to work for refugees in the region. Notably, a significantly high number of Syrian refugees in camps have not attended school for the last three years, thus creating an eventual pool of young people ripe for recruitment as the next generation of fighters by radical Islamists.

No doubt that a regional and international consortium is the only way to invalidate ISIL’s narrative towards youth, debilitate the group by targeting its financial resources, and retake ISIL-controlled areas. Because as it is aptly highlighted by American former senator John Ashcrof: “If necessity is the mother of invention, it is the father of cooperation”. Time is definitely of essence for the consortium’s players to genuinely cooperate like never before…

Reproduced by:

Wednesday, November 18, 2015

Jordan as Gateway to Greek Businesses


By Antonia Dimou

Original Publication: April-June 2015, Middle East and Mediterranean Journal, 

Reproduced: Webster University, College of Arts and Sciences 

                 
Map indicating locations of Greece and Jordan
                                        

Greece

Jordan
 (Photo From: https://en.wikipedia.org/wiki/Greece%E2%80%93Jordan_relations)                                            


Jordan is a free market oriented economy that offers a wide range of incentives to international investors. The kingdom’s Investment Promotion Law provides freedoms from customs and duties, unrestricted transfer of capital and profits, and tax income exemptions. Jordan is thus considered as an ideal base of investment braced by its strategic location in the heart of the Middle East that ensures unimpeded access to the markets of Asia and Africa. The growth oriented business environment of the kingdom largely explains the interest of Greek companies either to advance exports or transfer activities and open representation offices for investment security, stability and cash flow reasons
.
The timely interest of Greek companies to establish a presence in Jordan is accelerated by the existence of the Qualified Industrial Zones that give products NAFTA-like free access to the American market, and ensure a duty free entry, no quotas and an exquisite infrastructure. The promotion of Greek products in the Jordanian market is facilitated through a number of agreements signed over the years between the Athens Chamber of Commerce and Industry, the Federation of Greek Industries and the Exporters Association of Northern Greece with the counterpart Jordanian institutions. Also, frequent high-level political visits come to corroborate the constructiveness of interstate relations kindling trade and business partnerships that can yield mutual economic benefits.

The negative trade volume for Greece which exports to Jordan iron wires, plastic, fish, wood, soybean oil, processed petroleum products and foodstuff, can be reversed with the employment of a strategy by Greek companies to tap into rising demand in the kingdom, and breathe life into economic partnerships in the form of joint ventures. Assistive to reinforcing trade is the signing of an agreement on Customs Cooperation and the long-awaited accord on the Avoidance of Double Taxation.

The business performance between Greece and Jordan confirm that agreements lay the legal framework for sustainable transnational cooperation. It is no secret that the two signed agreements on tourism and the protection of investments as well as the accord on scientific and technological cooperation have been instrumental in the expansion of Greek economic presence in the kingdom.

Over the last decade in particular, a number of Greek companies have been active ininfrastructure projects, with most prominent, Aegek that built two dams; J&P/Avax that participated in the operation, maintenance, expansion and rehabilitation project of the Queen Alia International Airport in Amman which consisted the building of a new terminal of a total 90 thousand square meters surface; Eurodrip S.A. that acquired the National Drip Irrigation Company located in Amman to cater to the growing Middle Eastern Markets and introduced "In Line Pressure Compensating Drippers" pipes to Jordan; Exarchou-Nikolopoulos Consulting Engineers Overseas S.A. that provided technical expertise in hydraulics-hydrology and water supply projects; Intracom Jordan that established partnership with Oracle, a leading supplier of software for information management and the world's second largest applications software company; Metka S.A. that provided engineering, procurement and construction services for the expansion of Samra Thermal Power Station; and, Terna Energy that participated as consortium partner in the building of a wind farm at Al-Kamshah in the Irbid region.

Evidently, Jordan is an attractive place for Greek business and investment whose strategic location has turned it into a regional hub and thus a gateway to reaching third markets. Greece, amid recession and a severe cash crunch, is in need of rapidly expanding its regional business presence so that maximization of value, not complexity, is achieved. In such a time of crisis, Jordan offers to Greek businesses the opportunity to escape from the vicious cycle of recession and expand. An opportunity that must not be neglected because, as ancient Greek Demosthenes aptly once said; “Opportunities can often prove to be the beginning of great enterprises”

GAS DISCOVERIES IN THE EAST MEDITERRANEAN: A CATALYST FOR REGIONAL COOPERATION

By Antonia Dimou

Original Publication: In-depth Newsletter (Vol 12, Issue 3), Cyprus Center for European and International Affairs, University of Nicosia, June 2015, http://www.cceia.unic.ac.cy/index.php?option=com_content&task=view&id=452&Itemid=452


The discovery of natural gas resources in the East Mediterranean promise important benefits of energy security and economic gains. A 2010 US geological survey showed that the Levantine basin - offshore Israel, Gaza, Lebanon, Syria and Cyprus - could hold as much as 120 trillion cubic feet, thus securing supply of energy not only for the countries of the region but also for Europe.
Regional countries are currently at various stages of exploration and development which are however fraught by political risks and policy dilemmas. Thus cooperation, conflict resolution and the creation of interdependency structures are prerequisites to unlock the potential of the region and safeguard the unimpeded flow of future gas production.

A leading country for regional energy cooperation is Israel because the preparations to extract gas from its major fields, Leviathan and Tamar, are already at advanced stages. Israel looks into a combination of export options on the basis that gas is a game changer stressing the inevitability between macroeconomics and geopolitics. In this context, priority is given to Jordan as disruptions of energy imports from Egypt have impacted the Kingdom’s public budget and fiscal space for broader development goals. The sale of Israeli gas to Jordan falls within Amman’s broad strategy for transformational change in energy supply, including a diversification of natural gas imports from alternative sources in the region.

Noble Energy, a heavy foreign investor in Israel’s fields, has signed a contract worth $500 million to supply 66 billion cubic feet of gas from Israel’s Tamar field to Jordan’s Arab Potash and its affiliate Jordan Bromine. Leviathan partners Noble and Delek have also signed a non-binding letter of intent with Jordan’s National Power Electric, which will act as buyer of the gas, to supply 1.6tn cubic feet over a fifteen-year period. Other investigated projects focus on the construction of a 25-kilometer pipeline that would connect northern Israel to northern Jordan, facilitating the supply of natural gas to major Jordanian manufacturing plants. It is broadly acknowledged that infrastructure partnerships between Israel and Jordan can provide real incentives to normalize relations, given that the supply of cheap and reliable energy will bolster the kingdom’s economy and that Leviathan partners’ export earnings will increase.

An additional option for the monetization of Israeli gas centers on Egypt. Cairo’s political instability, heavy regulations, and ceiling on onshore prices have transformed over the years the Arab country from a gas exporter into a heavy energy importer. Although Egypt’s total proven reserves are approximately 2.2 trillion cubic meters, its production levels and reserves have not improved despite technological breakthroughs and massive capital expenditures, leaving two major LNG facilities in Damietta and Idku virtually idle.

Thus, pipelines from Israel’s gas reserves to Egypt for liquefaction and re-export has become a real choice, taking into account the close distance between the Egyptian and Israeli coasts. The option for the transport of Israeli gas to Egypt through either reversing the flow in the Egyptian export pipeline that crosses Sinai or the construction of a new undersea pipeline seems to be viable not only because of the royalties and revenues Israel will collect but also because of the potential positive impact on Egypt-Israel bilateral relations.

Already, partners of Israel’s Tamar field have signed a non-binding letter of intent to export up to 2.5 trillion cubic feet of gas over 15 years via the Damietta LNG plant in Egypt operated by Union Fenosa Gas, a joint venture between Spain’s Gas Natural and Italy’s ENI. Similarly, Leviathan partners reached a preliminary agreement with British Gas (BG), a British oil and gas company, to negotiate a deal to export gas to BG’s liquefied natural gas plant in Idku (northern Egypt) via a new undersea pipeline. If agreements are finalized, the benefits that will accrue for both counties will be multifold both geopolitically and economically.

Another export option to immediate neighbors includes a subsea pipeline from Israel’s Leviathan field to Turkey, but this is currently considered politically non-viable. There is widespread consensus in Israel that without a political reconciliation between the two countries, any advancement of an export agreement remains remote. Reservations are also expressed regarding financial security in any future framework energy agreement between Israel and Turkey, with suggestions centering on that financial security can be provided by a third party such as the U.S. Overseas Private Investment Corporation, the U.S. Export-Import Bank, or the German Euler Hermes company.

It is has nonetheless to be noted that the prospects of developing Israel's natural gas fields have been directly challenged since December 2014 by the Israeli Anti-trust Authority commissioner’s recommendation for investing companies to divest from the Tamar and Leviathan fields. The reason is that the Israeli regulatory framework foresees the establishment of a competitive gas market and upon this the anti-trust commissioner has the authority to block any trade agreement perceived as violating competition laws. If investing companies are forced to disengage, the possibility of developing Leviathan will be jeopardized for the coming years. Equal important, the resulting delays in progress on proposed supply projects between Israel and neighboring countries can damage the former's standing and credibility as a reliable supplier of gas resources. Thus, there is urgent need for a policy solution based on considerations that Israel cannot have a truly competitive market as there are two main fields and one meaningful buyer, which is the Israeli Electric Corporation. Practically, a policy solution can satisfy the terms of Israel’s anti-trust legislation which allows exemptions from limitations when a sector is viewed to have a natural monopoly.

No doubt that another significant player for regional energy cooperation is Cyprus given that gas discoveries can turn the island into a net natural gas exporter. The recent declaration of commerciality for the Aphrodite gas field by Noble, Delek and Avner Oil partners confirms the existence of substantial recoverable natural gas reserves in Block 12 of Cyprus’ Exclusive Economic Zone (EEZ). Commerciality of Aphrodite field presents a milestone to Cyprus’ transition from the stage of hydrocarbons exploration to that of exploitation, and a sugnificant step towards the monetization of the island’s indigenous natural gas reserves, both for domestic use, as well as exports.

Cyprus has already signed a Memorandum of Understanding with Egypt on gas cooperation for the downstream exploitation of output from the Aphrodite field by utilizing gas infrastructure existing in the Arab country via a direct subsea pipeline. Additionally, the inauguration of a tripartite partnership between Cyprus, Egypt and Greece with the signing of the Cairo declaration in November 2014 falls on maritime security and energy cooperation, and is currently reinforced by high level political and technical meetings. The Greek dimension in the partnership is important because of Greece’s strategic location at the crossroads of Europe, Asia and Africa that can cuddle Cyprus-Egypt as well as Israel energy cooperation by linking gas pipelines away from war risk zones.

In monetizing natural gas resources, Cyprus also needs to face a prime challenge associated with one of the multiple regional export options that are on the table, which is the pipeline project that would connect Israel’s Leviathan field to the Turkish coast. For the Cypriot side, the prerequisite to this export option is the resolution of the Cyprus conflict since the pipeline would have to cross Cyprus’s EEZ.

It is in any case noticeable that a vote of confidence related to the island’s regional energy standing is conceded by major oilfield services companies, such as Halliburton and Schlumberger that have based operations for the East Mediterranean in Cyprus.

No doubt that Cyprus’s natural gas discoveries present a game changer that poses all kinds of risks and opportunities for the island’s economic recovery. It is in this context that policies need to center on the creation of a Cypriot sovereign wealth fund, preferably based on the Norwegian model, to recycle revenues, and the establishment of a regional sponsor-supported non-governmental organization or council that would include energy companies, energy industry service providers, energy industry associations, and other related stakeholders in the region. Once established, the council could seek government participation from the littoral states of the Eastern Mediterranean. It could then become a point of reference and also an avenue of communication between governments and industry, as well as a clearinghouse for ideas and plans for mutually beneficial energy development in the region.

Evidently, the East Mediterranean discoveries provide a golden opportunity for energy security and cooperation, an opportunity that must not be neglected because as it is aptly highlighted in a famous Arabian proverb “three things come not back; the spoken word, the sped arrow, and the neglected opportunity”. It is in this spirit that regional countries coordinate policies and share best practices so that the opportunity is not neglected…


Reproduced by:
  • Worldpress Magazine, June 16, 2015, http://www.worldpress.org/article.cfm/Gas-Discoveries-in-the-East-Mediterranean
  • Research Institute for European and American Studies, June21, 2015, http://www.rieas.gr/research-areas/2014-07-30-08-58-27/balkan-studies-5/2438-gas-discoveries-in-the-east-mediterranean-a-catalyst-for-regional-cooperation
  • International Affairs Forum, Washington DC, June 26, 2015, http://www.ia-forum.org/Content/ViewInternalDocument.cfm?ContentID=8346
  • Energy International Risk Assessment, June 14, 2015, http://eiranews.com/index.php/en/open-forum/1794-antonia-dimou-gas-discoveries-in-the-east-med-a-catalyst-for-regional-cooperation